2016
DOI: 10.1177/1091142116671803
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Spillover Effects in a Federal Country with Vertical Tax Externalities

Abstract: We analyze how spillover effects may affect the choice of a federal tax rate in a federal country with vertical tax externalities. Our main result shows the conditions under which the federal tax rate with spillover effects is lower or higher than the federal tax rate without spillover effects. The effects of vertical tax externalities can be modified by the reaction of the federal government to the horizontal externality due to spillover effects.

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Cited by 1 publication
(1 citation statement)
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“…Finally, in the field of public finance, the advantages of fiscal federalism and ways to achieve it received important analysis from Petretto and Lattarulo () and Grazzini and Petretto () the goal being to maximize inter‐regional equity and reform regional and local taxation systems.…”
Section: Contributions To Regional and Urban Policiesmentioning
confidence: 99%
“…Finally, in the field of public finance, the advantages of fiscal federalism and ways to achieve it received important analysis from Petretto and Lattarulo () and Grazzini and Petretto () the goal being to maximize inter‐regional equity and reform regional and local taxation systems.…”
Section: Contributions To Regional and Urban Policiesmentioning
confidence: 99%